From groceries to placemaking, a wide-ranging exploration of the retail industry
Richard Potter, CEO of Peak, says category-specific retailers have an opportunity to shine with clever AI-driven data analysis.
AI is empowering footwear retailers to personalise communications at the right time, in the right way and with the right content.
As the unfortunate plight of some of the UK’s most well-known retail businesses continues to dominate headlines with sales declines and store closures, you could be forgiven for thinking that it’s all doom and gloom across the sector at the moment.
But the fact is that retail is undergoing a revolution, and this is presenting new and exciting opportunities to thrive.
Artificial intelligence (AI) and machine learning are leading the transformation of the industry. Our own research shows that those e-commerce retailers placing AI at the centre of their operations are growing 30% faster than those who aren’t, with 50% higher profit margins.
The reason for this is that we can use AI to analyse the factors at play in the constantly changing behaviour of consumers – like how, why, where and when we shop – in a way that we otherwise couldn’t. This data can then be used to shape and enhance retail operations, such as by informing product offerings, personalising communications and improving the efficiency of supply chains.
The concept of linking a physical store with digital activity, meanwhile, is growing, and the combined phygital experience can be sculpted and enhanced using AI to analyse and extrapolate from behavioural data.
There is no doubt that every retail brand will need to use AI if they want to survive this difficult time
For an example of this in practice, look at Peak’s recent work with clicks-and-bricks footwear retailer Footasylum. With access to a wide range of customer data, we unified and delved into its customer base to deliver a single customer view.
We then used AI to draw insights based on past behavioural and transactional data – notably from both in-store and online – using powerful machine learning algorithms to classify customers in terms of in-market predictions, product recommendations and brand and style preferences, as well as churn risk.
With this information, Footasylum has been able to better engage with its customers and adapt its product offerings accordingly. As a direct result of implementing this AI system into the core of its business, Footasylum has recorded a 28% rise in revenues generated from its email marketing communications.
A truly customised experience, whether that is online or in-store, is no longer desired by the modern consumer – it’s expected. The aforementioned wealth of customer data available, when utilised with AI, can empower retailers to deliver hyper-personalised marketing communications, with personalised product recommendations targeting customers at the right time, in the right way and with the right content.
Looking ahead, it will be those retailers that remain on the front foot and adopt the right technology now that will continue to compete in the future. There is no doubt that every brand and business will need to be able to use AI if they want to survive what is proving to be a difficult time for some of the most recognised retailers in the UK and the US.
Richard Potter is CEO of Peak, an artificial intelligence firm based in Manchester, London and Jaipur.